Company Overview - HighPeak Energy, Inc. (HPK) is currently experiencing significant attention in the options market, particularly with the Oct 17, 2025 $25.00 Call option showing some of the highest implied volatility among equity options [1] Implied Volatility Insights - Implied volatility indicates the market's expectations for future price movements, suggesting that investors anticipate a significant price change for HighPeak Energy shares [2] - High levels of implied volatility may also signal an upcoming event that could lead to a substantial rally or sell-off [2] Analyst Sentiment - HighPeak Energy holds a Zacks Rank 2 (Buy) in the Oil and Gas - Exploration and Production - United States industry, which is positioned in the Bottom 35% of the Zacks Industry Rank [3] - Over the past 60 days, the Zacks Consensus Estimate for the current quarter has increased from 5 cents per share to 9 cents per share, indicating positive sentiment among analysts [3] Trading Strategy Implications - The current high implied volatility could suggest a developing trading opportunity, as options traders often seek to sell premium on options with elevated implied volatility [4] - This strategy aims to benefit from the decay of options value, with the expectation that the underlying stock will not move as much as initially anticipated by the market [4]

Group 1 - The article focuses on analyzing oil and gas companies, specifically highlighting HighPeak Energy and its valuation within the industry [1] - The analysis includes a breakdown of essential factors such as balance sheets, competitive positioning, and development prospects of the companies [1] - The service provided offers exclusive insights and analysis to members, which are not available on the free site [1] Group 2 - The oil and gas industry is characterized as a boom-bust, cyclical sector, requiring patience and experience for successful investment [2] - The author has extensive experience in the industry, holding qualifications such as an MBA and MA, along with a background as a CPA [2]

Core Viewpoint - HighPeak Energy, Inc. (HPK) is experiencing significant selling pressure, with a 17.8% decline over the past four weeks, but is now positioned for a potential trend reversal due to being in oversold territory and positive earnings outlook from analysts [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold conditions, with a reading below 30 indicating a stock is oversold [2]. - HPK's current RSI reading is 28.89, suggesting that the heavy selling pressure may be exhausting itself, indicating a potential trend reversal [5]. Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts that HPK will report better earnings than previously predicted, leading to a 6.1% increase in the consensus EPS estimate over the last 30 days [7]. - HPK holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [8].

Group 1 - HighPeak Energy (NASDAQ: HPK) reported an 11% drop in Q2 2025 oil production compared to Q1 2025, attributed to the timing of wells coming online and slowed development activity due to oil prices in the $60s [2] - The decline in production indicates potential challenges for HighPeak Energy in maintaining output levels amidst fluctuating oil prices [2] - The company is part of a broader focus on value opportunities and distressed plays within the energy sector, as highlighted by the investment group Distressed Value Investing [2] Group 2 - The article emphasizes the importance of analytical experience in evaluating investment opportunities, particularly in the energy sector [2] - The author, Aaron Chow, has over 15 years of analytical experience and previously co-founded a mobile gaming company, showcasing a diverse background that may influence investment strategies [2] - The investment group Distressed Value Investing aims to provide exclusive research and insights into various companies, indicating a commitment to thorough analysis in the energy market [1][2]

Financial Data and Key Metrics Changes - The company reported EBITDAX of over $155 million for the quarter, with margins remaining strong at $33.58 per barrel of oil equivalent despite lower commodity prices [5][6][27] - Capital expenditures (CapEx) for the second quarter were 30% lower than the first quarter, aligning with the company's internal expectations [5][15] Business Line Data and Key Metrics Changes - The company reduced its drilling activity to one rig in mid-May, which impacted production levels but was a strategic decision to manage capital effectively [5][15] - The first simulfrac job was completed successfully, resulting in savings of approximately $400,000 per well, which is about a 10% reduction in total completion costs [19][20] Market Data and Key Metrics Changes - The company has hedged over 50% of its volumes for the second half of the year with a weighted average floor price of over $62 per barrel [12][13] - Approximately 90% of the second half 2025 gas volumes are hedged at a price of $4.43 per MMBtu [13] Company Strategy and Development Direction - The company aims to maintain capital discipline and flexibility in its operations, with plans to add a second rig in September while monitoring market conditions [15][26] - The recent refinancing of the term loan and revolving credit facility has solidified the company's credit profile and extended debt maturities to September 2028 [7][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving production guidance for 2025 despite fluctuations in quarterly volumes due to the timing of well completions [5][42] - The company remains focused on long-term value creation and is prepared to adapt its development plans based on market conditions [26][28] Other Important Information - The company's solar farm has generated significant power savings and reduced CO2 emissions, contributing to its sustainability goals [22] - The company is exploring hybrid simulfrac operations to increase efficiency in completions [38] Q&A Session Summary Question: How much liquidity does the company want to maintain? - The company aims to maintain a liquidity level of $200 million to $250 million, depending on oil prices and hedging strategies [30][31] Question: Can you explain the swings in working capital changes? - The changes in working capital were due to reducing from two rigs to one, with expectations for stability in the third quarter and potential increases as a second rig is added [32][34] Question: Are there any limiting factors on using simulfrac for more completions? - The ability to use simulfrac is influenced by the number of wells on a pad and the current rig count, but the company is exploring ways to implement it more broadly [36][38] Question: How does the inventory of wells in progress affect the decision to add a second rig? - The current inventory of 20 wells is manageable with one rig, but the company will monitor the situation as it progresses [39] Question: What impact will the Middle Spraberry inventory have on year-end reserves? - The company anticipates a significant increase in PUDs associated with Middle Spraberry wells by the end of 2025 compared to 2024 [40][41] Question: What are the production expectations for the next couple of quarters? - Production may fluctuate due to the timing of well completions, but the yearly guidance remains solid [42]

Financial Performance & Position - HighPeak Energy reported Q2 2025 production of 48600 barrels of oil equivalent per day (MBoe/d)[14] - The company's Q2 2025 unhedged EBITDAX per BOE was $3358[14] - Q2 2025 EBITDAX totaled $156 million[14] - As of June 30, 2025, the company's pro forma total debt was $12 billion, with a net debt of $1032 billion[16] - The company's total liquidity stood at $268 million, including $168 million in cash and cash equivalents[16] Debt & Hedging - HighPeak Energy extended its Term Loan and Revolving Credit Facility maturities to September 2028 and upsized the Term Loan to $12 billion[21] - Approximately 53% of the company's oil volumes and 89% of gas volumes are hedged for the second half of 2025[25] Operational Efficiency - The company achieved savings of approximately $400000 per well by using Lorin Pad Simulfrac[29] - Simulfrac savings led to a 10% reduction in completion costs[30] - Solar savings from June to December 2024 amounted to $809487, with a CO2 reduction of 4616 metric tons[34] Asset Base - HighPeak Energy has over 143000 net acres[14,35] - The company has over 1000 sub $50/Bbl break-even locations in primary zones[14,35]

Core Insights - HighPeak Energy, Inc. reported quarterly earnings of $0.1 per share, missing the Zacks Consensus Estimate of $0.12 per share, and down from $0.28 per share a year ago, representing an earnings surprise of -16.67% [1] - The company posted revenues of $200.4 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 5.28%, and down from $275.27 million year-over-year [2] - HighPeak Energy shares have declined approximately 40.4% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $209.49 million, and for the current fiscal year, it is $0.69 on revenues of $885.36 million [7] - The estimate revisions trend for HighPeak Energy was favorable prior to the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently in the bottom 36% of over 250 Zacks industries, suggesting that the outlook for the industry can significantly impact stock performance [8]

[PART I. FINANCIAL INFORMATION](index=10&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the company's unaudited condensed consolidated financial statements for the quarterly period ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly increased to $3.09 billion, while total liabilities decreased to $1.44 billion as of June 30, 2025 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $21,853 | $86,649 | | Total current assets | $122,216 | $195,012 | | Total crude oil and natural gas properties, net | $2,943,774 | $2,845,729 | | **Total assets** | **$3,089,453** | **$3,063,288** | | **Liabilities & Equity** | | | | Total current liabilities | $140,685 | $284,630 | | Long-term debt, net | $1,027,354 | $928,384 | | **Total liabilities** | **$1,435,367** | **$1,460,832** | | **Total stockholders' equity** | **$1,654,086** | **$1,602,456** | [Condensed Consolidated Statements of Operations](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income for Q2 2025 decreased to $26.2 million from $29.7 million year-over-year, driven by lower operating revenues Key Performance Indicators - Three Months Ended June 30 (in thousands, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total operating revenues | $200,400 | $275,266 | | Income from operations | $43,444 | $87,260 | | Gain (loss) on derivative instruments, net | $26,446 | $(2,702) | | Net income | $26,176 | $29,717 | | Diluted EPS | $0.19 | $0.21 | Key Performance Indicators - Six Months Ended June 30 (in thousands, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total operating revenues | $457,848 | $563,030 | | Income from operations | $133,823 | $190,280 | | Gain (loss) on derivative instruments, net | $18,519 | $(55,745) | | Net income | $62,511 | $36,155 | | Diluted EPS | $0.45 | $0.25 | [Condensed Consolidated Statements of Cash Flows](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to $298.3 million for the first six months of 2025, contributing to a $64.8 million net decrease in cash Cash Flow Summary - Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $298,265 | $373,770 | | Net cash used in investing activities | $(322,078) | $(324,612) | | Net cash used in financing activities | $(40,983) | $(85,762) | | **Net decrease in cash and cash equivalents** | **$(64,796)** | **$(36,604)** | [Notes to Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, derivative instruments, debt structure, and significant subsequent events like credit agreement amendments - The company utilizes various derivative instruments to hedge against commodity price volatility, with a fair value net asset of **$16.4 million** as of June 30, 2025[89](index=89&type=chunk)[94](index=94&type=chunk)[163](index=163&type=chunk) - As of June 30, 2025, the company had **$1.02 billion** outstanding under its Term Loan Credit Agreement and **$30.0 million** under its Senior Credit Facility Agreement[97](index=97&type=chunk) - Subsequent to quarter-end, the company amended its credit agreements, extending maturities to 2028, upsizing the term loan to **$1.2 billion**, and deferring amortization payments[140](index=140&type=chunk) - The company has a crude oil marketing contract with a remaining monetary commitment of approximately **$123.9 million** as of June 30, 2025[116](index=116&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, operational results, liquidity, and capital resources amid volatile market conditions [Overview and Recent Events](index=41&type=section&id=Overview%20and%20Recent%20Events) The company operates in the Midland Basin and recently amended its debt facilities to enhance liquidity and defer principal payments - As of June 30, 2025, the company's assets consisted of approximately **143,826 net acres** in the Midland Basin, with an average working interest of **93%**[145](index=145&type=chunk) - In August 2025, the company amended its credit agreements to extend maturities to 2028, upsize its Term Loan to **$1.2 billion**, and defer **$30.0 million** in quarterly amortization payments for one year[146](index=146&type=chunk) [Industry Considerations and Outlook](index=42&type=section&id=Industry%20Considerations%20and%20Outlook) The company anticipates continued price volatility due to market factors and maintains a flexible one to two drilling rig program - The market environment is influenced by OPEC's production decisions, US tariffs, and geopolitical instability, leading to **significant price volatility**[150](index=150&type=chunk)[152](index=152&type=chunk) - The company plans to average a **one to two (1-2) drilling rig program** for the remainder of 2025, maintaining flexibility in its capital plan[157](index=157&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Q2 2025 revenues decreased 27% year-over-year due to lower realized prices, despite flat sales volumes and reduced DD&A expenses Average Daily Sales Volumes | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Crude Oil (Bbls) | 33,913 | 37,073 | (9)% | | NGL (Bbls) | 7,462 | 6,018 | 24% | | Natural Gas (Mcf) | 43,642 | 32,640 | 34% | | **Total (Boe)** | **48,649** | **48,531** | **0%** | Weighted Average Realized Prices (excluding derivatives) | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Crude Oil per Bbl | $63.74 | $81.39 | (22)% | | NGL per Bbl | $20.34 | $20.32 | 0% | | Natural Gas per Mcf | $1.50 | $0.13 | 1,054% | | **Total per Boe** | **$45.27** | **$62.33** | **(27)%** | Key Operating Costs per Boe | Cost Category | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Production Costs (excl. workovers) | $6.55 | $6.79 | (4)% | | DD&A Expense | $22.87 | $28.91 | (21)% | | G&A Expense | $1.28 | $1.07 | 20% | [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is sourced from operations and credit facilities, with a 2025 capital budget of $375-$405 million for drilling and completions - The 2025 capital budget is expected to be approximately **$375 to $405 million** for drilling and completion, plus additional funds for infrastructure[184](index=184&type=chunk) Cash Flow Summary - Six Months Ended June 30 (in thousands) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $298,265 | $373,770 | | Net cash used in investing activities | $(322,078) | $(324,612) | | Net cash used in financing activities | $(40,983) | $(85,762) | [Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are commodity price and interest rate volatility, which are partially managed through derivatives - A **$1.00 per barrel change** in the weighted average crude oil price would have impacted annualized revenues by approximately **$14.0 million** for the six months ended June 30, 2025[203](index=203&type=chunk) - A **1% increase in interest rates** on outstanding debt would result in an annual increase in interest expense of approximately **$10.5 million**[211](index=211&type=chunk) - The company uses commodity derivative instruments to hedge price risk, as required by its credit agreements, to provide cash flow certainty[204](index=204&type=chunk) [Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The principal executive and financial officers concluded that the company's **disclosure controls and procedures were effective** as of the end of the period[212](index=212&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter ended June 30, 2025[213](index=213&type=chunk) [PART II. OTHER INFORMATION](index=62&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings that are not expected to have a material adverse financial impact - The company states that while it is party to various legal proceedings, it does not expect the outcomes to have a **material adverse effect** on its financial condition[215](index=215&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) Key risks include commodity price volatility, trade policy impacts, capital intensity, inflation, and geopolitical instability - Key risks include: - **Commodity Price Volatility:** Sustained price declines could adversely affect business and financial condition - **Tariffs and Trade Policy:** Trade restrictions could increase costs and disrupt the supply chain - **Capital Needs:** Development projects require substantial capital, and financing ability is uncertain - **Inflation and Costs:** Rising inflation may increase capital and operating costs, impacting profitability - **Geopolitical Risks:** Political instability in energy-producing regions can impact global supply and prices - **Strategic Alternatives Process:** The ongoing evaluation creates uncertainty and may not result in a transaction[217](index=217&type=chunk)[219](index=219&type=chunk)[224](index=224&type=chunk)[233](index=233&type=chunk)[237](index=237&type=chunk)[241](index=241&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common stock was repurchased in Q2 2025, with $39.9 million remaining under the authorized repurchase program - The company **did not repurchase any of its common stock** during the three months ended June 30, 2025[246](index=246&type=chunk) - As of June 30, 2025, approximately **$39.9 million remained available** under the company's stock repurchase program, which expires on December 31, 2025[246](index=246&type=chunk)[248](index=248&type=chunk) [Other Information](index=70&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No director or officer of the Company adopted or terminated a **Rule 10b5-1 trading arrangement** during the quarter[249](index=249&type=chunk) [Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including debt agreements and required officer certifications

[HighPeak Energy, Inc. Second Quarter 2025 Financial and Operating Results](index=1&type=section&id=HighPeak%20Energy%2C%20Inc.%20Second%20Quarter%202025%20Financial%20and%20Operating%20Results) [Highlights and Recent Events](index=1&type=section&id=Highlights%20and%20Recent%20Events) The company reported stable Q2 2025 sales volumes and net income while amending its credit facilities to extend maturity and increase borrowing capacity Q2 2025 Key Metrics | Metric | Value | | :--- | :--- | | Average Sales Volumes | 48.6 MBoe/d | | Net Income | $26.2 million | | Diluted EPS | $0.19 | | EBITDAX | $156.0 million | | Lease Operating Expenses (ex. workover) | $6.55 per Boe | | Quarterly Dividend | $0.04 per share | - On August 4, 2025, the Company materially amended its Term Loan and Senior Credit Facility (Super Priority RCF) with key changes including **extended maturity to September 2028**, an **upsized Term Loan to $1.2 billion**, and deferred mandatory amortization payments until September 30, 2026[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) The amended Term Loan and proactive hedging strategy provide significant financial flexibility to capitalize on future opportunities, particularly with anticipated lower interest rates - The amendment and extension of the term loan is a strategic initiative that **increases capital structure flexibility**, enhances liquidity, and minimizes refinancing costs[4](index=4&type=chunk)[5](index=5&type=chunk) - The floating interest rate structure of the term loan is preferred over a high-yield, fixed-rate bond, as it allows the company to **benefit from projected lower interest rates**[5](index=5&type=chunk) - A significant portion of production has been hedged for the next 18 months to **minimize downside risk** from potential commodity price declines[5](index=5&type=chunk) [Operational and Financial Performance](index=3&type=section&id=Operational%20and%20Financial%20Performance) The company maintained production at 48.6 MBoe/d while reducing capital expenditures by over 30% quarter-over-quarter to $125.4 million [Operational Update](index=3&type=section&id=Operational%20Update) - Q2 2025 sales volumes averaged **48.6 MBoe/d**, composed of approximately 70% crude oil and 85% total liquids[7](index=7&type=chunk) - During the quarter, the company operated with an average of one drilling rig and one frac crew, drilling 13 gross wells and **turning 14 gross wells to production**[8](index=8&type=chunk) - As of June 30, 2025, there were **20 gross horizontal wells** in various stages of drilling and completion[8](index=8&type=chunk) [Financial Results](index=3&type=section&id=Financial%20Results) Q2 2025 Financial Summary | Metric | Value | | :--- | :--- | | Net Income | $26.2 million | | Diluted EPS | $0.19 | | EBITDAX | $156.0 million | | Diluted EBITDAX per share | $1.12 | Q2 2025 Average Realized Prices | Product | Price (Excluding Derivatives) | Price (Including Derivatives) | | :--- | :--- | :--- | | Crude Oil | $63.74 / Bbl | $65.27 / Bbl | | NGL | $20.34 / Bbl | $20.34 / Bbl | | Natural Gas | $1.50 / Mcf | $2.18 / Mcf | | **Overall** | **$45.27 / Boe** | **$46.94 / Boe** | - Total capital expenditures for Q2 2025 were **$125.4 million**, a decrease of over 30% compared to Q1 2025[11](index=11&type=chunk) - Cash costs for the quarter were **$11.69 per Boe**, leading to an unhedged EBITDAX margin of $33.58 per Boe[10](index=10&type=chunk) [Hedging Strategy](index=3&type=section&id=Hedging%20Strategy) HighPeak has entered into additional derivative contracts to hedge a significant portion of its forecasted production through early 2027 [Crude Oil Hedges](index=4&type=section&id=Crude%20Oil%20Hedges) - The company has outstanding crude oil derivative instruments, including swaps, collars, and puts, **extending through March 2027** to mitigate price volatility[12](index=12&type=chunk)[13](index=13&type=chunk) [Natural Gas Hedges](index=4&type=section&id=Natural%20Gas%20Hedges) - HighPeak has natural gas swap contracts in place for **30,000 MMBtu per day through 2026** and a reduced amount for Q1 2027, with weighted average prices ranging from $4.30 to $4.43 per MMBtu[14](index=14&type=chunk)[15](index=15&type=chunk) [Shareholder Returns and Corporate Information](index=5&type=section&id=Shareholder%20Returns%20and%20Corporate%20Information) The company declared a quarterly dividend of $0.04 per share, and outstanding warrants are set to expire on August 21, 2025 - The Board of Directors declared a quarterly dividend of **$0.04 per share**, payable on September 25, 2025, to stockholders of record on September 2, 2025[16](index=16&type=chunk) - The company's outstanding warrants (NASDAQ: HPKEW), which allow holders to purchase common stock at $11.50 per share, are set to **expire on August 21, 2025**[17](index=17&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) Unaudited financials show total assets of $3.09 billion, with net income of $62.5 million and operating cash flow of $298.3 million for the first half of 2025 [Unaudited Condensed Consolidated Balance Sheet](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheet) Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $21,853 | $86,649 | | Total assets | $3,089,453 | $3,063,288 | | Long-term debt, net | $1,027,354 | $928,384 | | Total stockholders' equity | $1,654,086 | $1,602,456 | [Unaudited Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total operating revenues | $200,400 | $275,266 | | Income from operations | $43,444 | $87,260 | | Net income | $26,176 | $29,717 | | Diluted EPS | $0.19 | $0.21 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $298,265 | $373,770 | | Net cash used in investing activities | ($322,078) | ($324,612) | | Net cash used in financing activities | ($40,983) | ($85,762) | | **Net decrease in cash** | **($64,796)** | **($36,604)** | [Unaudited Summary Operating Highlights](index=11&type=section&id=Unaudited%20Summary%20Operating%20Highlights) - Average daily sales volumes in Q2 2025 were **48,649 Boe**, nearly flat compared to 48,531 Boe in Q2 2024[33](index=33&type=chunk) - The average realized price per Boe, excluding derivatives, **decreased to $45.27** in Q2 2025 from $62.33 in Q2 2024, primarily due to lower crude oil prices[33](index=33&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=12&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) The company reported Q2 2025 EBITDAX of $156.0 million, negative free cash flow of $42.7 million, and adjusted net income of $13.9 million [Reconciliation of Net Income to EBITDAX and Discretionary Cash Flow](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDAX%20and%20Discretionary%20Cash%20Flow) EBITDAX Reconciliation for Q2 (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | $26,176 | $29,717 | | EBITDAX | $156,024 | $215,829 | [Reconciliation of Net Cash Provided by Operations and Free Cash Flow](index=12&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operations%20and%20Free%20Cash%20Flow) Free Cash Flow Reconciliation for Q2 (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $141,213 | $202,331 | | Additions to crude oil and natural gas properties | ($126,338) | ($164,199) | | Free cash flow | ($42,677) | $6,447 | [Reconciliation of Net Income to Adjusted Net Income](index=13&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Adjusted Net Income Reconciliation for Q2 2025 (in thousands) | Metric | Amount | Per Diluted Share | | :--- | :--- | :--- | | Net income | $26,176 | $0.19 | | Noncash derivative gain, net | ($19,034) | ($0.14) | | **Adjusted net income** | **$13,851** | **$0.10** |

Core Insights - HighPeak Energy, Inc. reported its financial and operational results for the second quarter of 2025, highlighting a net income of $26.2 million and EBITDAX of $156.0 million, reflecting a stable performance despite a challenging market environment [1][9]. Financial Performance - The company achieved net income of $26.2 million, or $0.19 per diluted share, for the second quarter of 2025, compared to $29.7 million in the same period last year [9][38]. - EBITDAX for the quarter was $156.0 million, or $1.12 per diluted share, down from $215.8 million year-over-year [9][40]. - Total operating revenues were $200.4 million, a decrease from $275.3 million in the prior year [32]. - Average realized prices were $63.74 per barrel of crude oil, $20.34 per barrel of NGL, and $1.50 per Mcf of natural gas, leading to an overall realized price of $45.27 per Boe [10][35]. Operational Highlights - Average sales volumes for the second quarter were 48.6 MBoe/d, remaining flat compared to the same period last year [6][35]. - The company operated one drilling rig and one frac crew, drilling 13 gross horizontal wells and turning in line 14 gross producing wells [7][8]. - Capital expenditures for the quarter totaled $125.4 million, a reduction of over 30% compared to the first quarter of 2025 [11]. Debt and Liquidity Management - HighPeak amended and extended its Term Loan and Senior Credit Facility, increasing borrowings to $1.2 billion and extending maturity dates to September 2028 [5][8]. - The amendment allows for deferred mandatory amortization payments of $30 million per quarter until September 2026, enhancing liquidity and flexibility [5][8]. - The company has hedged a significant portion of its production for the next 18 months to mitigate downside risk from potential commodity price declines [5][12]. Dividend Declaration - The Board of Directors declared a quarterly dividend of $0.04 per share, amounting to approximately $5.0 million, payable in September 2025 [16].